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Gartner cuts forecast for global IT spending growth in 2019

Gartner cuts forecast for global IT spending growth in 2019
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Global IT spending is projected to total $3.79 trillion in 2019, an increase of 1.1% from 2018, a new report from market research firm Gartner showed.
“Currency headwinds fueled by the strengthening US dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter,” said John-David Lovelock, research vice president at Gartner. 

Gartner had previously projected global IT spending to reach $3.8 trillion in 2019, an increase of 3.2% from expected spending of $3.7 trillion in 2018.

“Through the remainder of 2019, the US dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars," Lovelock said.

Lovelock said that technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down.

“Successful product managers in 2020 will have had a long-term view to the changes made in 2019,” he said.

In terms of segments, the data centre systems will experience the largest decline in 2019 with a decrease of 2.8%. This, he said, is mainly due to expected lower average selling prices (ASPs) in the server market driven by adjustments in the pattern of expected component costs. 

However, he pointed out that the shift of enterprise IT spending from traditional (non-cloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market. 

In 2019, the market is forecast to reach $427 billion, up 7.1% from $399 billion in 2018, the report showed, adding that the largest cloud shift has so far occurred in application software. 

The firm also said that it expects increased growth for the infrastructure software segment in the near-term, particularly in integration platform as a service (iPaaS) and application platform as a service (aPaaS). 

“Disruptive emerging technologies, such as artificial intelligence (AI), will reshape business models as well as the economics of public- and private-sector enterprises. AI is having a major effect on IT spending, although its role is often misunderstood,” Lovelock said.

He added that AI is not a product and is really a set of techniques or a computer engineering discipline.

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